ABSTRACT
This social research is about the impacts of microcredit on poor people's living conditions in terms of income, family well-being, empowerment and social capital in Chile. Microcredit, a financial instrument, is given to poor people in order to improve their economic and social conditions. Hence, I interviewed 15 clients of different microfinance institutions to evaluate the impact of microcredit on their living conditions. Moreover, I also interviewed managers and directors of microfinance institutions in order to have a better understanding of the topic. The structure of the paper consists in a presentation of two approaches which function as a backdrop of my analysis. Microfinance institutions work with two different approaches: the minimalist and the integrated. Microfinance institutions with a minimalist approach such as banks and cooperatives offer credit and other financial services to poor people which already have a consolidated business. These institutions work in line with a more neoliberal logic because they consider money as the solution of people's poverty. On the other hand, microfinance institutions with an integrated approach such as NGOs and foundations offer their clients not only credit but also business training and networks. These institutions conceptualize poverty in a more holistic way as not only lack of money but also as lack of business training and networks. Hence, they work in a logic closer to the solidarity economy approach. The results of my interviews show a quasi-general improvement of living conditions in terms of income. With regards to family well-being the results are encouraging in terms of consumption and savings but they are not about health and education. With regards to empowerment and social capital, the impacts on poor people's living conditions are different depending on the microfinance institution which offer them credit. Indeed, microcredit of microfinance institution with an integrated approach tend to have a greater impact on people's lives in terms of empowerment and social capital in terms of participation, leadership and social networks. The conclusion are that all microfinance institutions, independently from the approach, have positive impacts on income and family well-being in terms of consumption and savings. On the other hand, only microfinance institutions with an integrated approach have positive results on empowerment and social capital. Hence, in order to have a more integrated development, the promotion of group lending could promote not only economic but also social development.